While still trailing the S&P 500 this year, they've almost equaled the performance of stocks from companies making large repurchases of shares.

Stocks of dividend payers are catching up to those of companies with high levels of share buybacks, after spending a year trailing far behind.

Last year, the Nasdaq Buyback Achievers Index soared 44%, well outpacing the S&P 500's 30% gain. Investors like buybacks for two reasons: By reducing the share count, they give remaining stockholders a bigger interest in the company, and, all other things being equal, they also allow...